2010] 1

Constructing a Regulatory Regime for the

Exploitation of Resources on the Moon and Other
Celestial Bodies: A Balancing Act

Jason R. Bonin1 & Fabio Tronchetti 2

A BSTRACT
Law can be both a catalyst and consequence of technological change. Nowhere is this fact
more clear than in the realm of space law. Man’s initial ascent to space was manifested not
only through scientific discovery, but also through legal innovation, as both a means of keeping
up with and shaping the use of outer space. During the initial period of space exploration, legal
norms were developed in a world of state actors, designed to promote the continued peaceful
use of space and to prevent claims of dominion or sovereignty. Since that time, further
technological development and shifts in economic ideologies have shifted the focus from
government-based exploration to private entity-based exploitation, particularly with respect
to the moon and other celestial bodies. This article evaluates the legal landscape in outer space.
Interested parties maintain three legal positions in relation to the exploitation of extraterrestrial
resources located on such bodies. The first holds that we need to revisit space law in order to
create the legal certainties required to harness the innovatory capabilities of the private sector,
citing the need for real property rights to successfully achieve this end. The second, asserted
by an increasing number of “entrepreneurs”, claims that space law does not prevent private
citizens from claiming ownership of extraterrestrial real estate. While these claims are bogus,
attempts at enforcement and a growing belief in their validity may retard the development of
legitimate commercial ventures. The third position, principally held by developing states, is

1
B.A., J.D., University of Florida; LL.M. (Adv.), cum laude, Leiden University, Netherlands. The
author is currently a Ph.D. candidate at the National University of Singapore, where he is researching
air transport liberalization in East Asia. Questions or comments can be addressed to
jason.bonin@gmail.com.
2
Associate Professor of Law and Associate Director, Space Law Research Institute, School of Law,
Harbin Institute of Technology, People’s Republic of China. He can be reached by e-mail at
fabio.tronchetti@yahoo.com.
The authors would like to thank, in both their individual and collective capacities, the Indian
Journal of International Economic Law for the invitation to submit this article for publication in the
present volume, as well as Professor Haifeng Zhao for his insightful comments on an earlier draft
of this article. All errors are, as always, our own.
2 THE INDIAN JOURNAL OF INTERNATIONAL ECONOMIC LAW [Vol. 3 (2)

the benefits derived from extraterrestrial resources should be shared by all, and that a
mechanism for the equitable redistribution of such benefits needs to be put in place. The
article argues that the current regime is largely adequate to deal with issues of outer space.
However, the law is unclear in relation to the level of resource extraction permitted by the
Outer Space Treaty. It further argues that, while the issue is not imperative, this situation is
undesirable in the long term, and examines past controversies in outer space law to determine
an ideal path towards the resolution of the issue.

C ONTENTS

I. INTRODUCTION .......................................................................................... 3
II. EXTRATERRESTRIAL PROPERTY RIGHTS IN LAND AND RESOURCES ..................... 5
A. The Non-Appropriation Principle and Claims to
Rights in Land ................................................................................. 6
B. Objects Affixed to the Moon or Other Celestial Bodies .............. 11
C. The Exploitation of Resources on the Moon and
Other Celestial Bodies .................................................................. 12
III. EXTRATERRESTRIAL REAL ESTATE: CURRENT CLAIMS AND POTENTIAL ISSUES .. 14
A. A Brief History of Private Claims to
Extraterrestrial Real Estate ........................................................... 15
B. Problems of Misinterpretation and Misallocation ....................... 18
IV. BETWEEN OWNERSHIP INCENTIVES AND DISTRIBUTIONAL EQUITY:
STRIKING THE BALANCE ........................................................................... 21
A. The Moon Agreement and WARC-ORB-88:
A Common Tale with Divergent Endings.. .................................. 22
B. Going Forward: Some Suggestions and Considerations ............... 25
V. CONCLUSION ........................................................................................... 27
2010] CONSTRUCTING A REGULATORY REGIME FOR THE EXPLOITATION OF 3
RESOURCES ON THE MOON AND OTHER CELESTIAL BODIES

I. I NTRODUCTION
Law can be both a catalyst and consequence of technological change. This
statement is particularly evident in the realm of space law. Over the past
sixty years, the possibilities for the exploration and utilization of
extraterrestrial resources has transformed from visionary dream to popular
reality. Man’s initial ascent to space was manifested not only through scientific
discovery, but also through legal innovation in the international arena,
functioning as both a means of keeping up with and shaping the many use of
outer space.

During the initial period of space exploration, legal norms were developed
in a world of state actors and were designed to promote its continued peaceful
use and to prevent exclusionary acts through claims of dominion or
sovereignty.3 Since that time, further technological development, political
change and shifts in economic ideologies have shifted the focus from
government-based exploration to private entity-based exploitation. Private
actors are competing with government entities in the areas of launch4 and
telecommunications satellite services.4 Military technologies such as GPS
are finding global markets in the private sector. The United States has
restructured its legal framework to accommodate commercial space flight,6
and space tourism has moved beyond the stuff of science fiction into the realm
of being technologically, and commercially, possible.7 While these

3
See generally, G.A. Res. 1962 (XVIII), U.N. Doc. A/5515 (Dec. 13, 1963); G.A. Res. 1721 (XVI),
U.N. Doc. A/5026 (Dec. 20, 1961). These principles were codified in the Treaty on Principles
Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon
and Other Celestial Bodies, Jan. 27, 1967, 610 U.N.T.S. 205 [hereinafter Outer Space Treaty].
Many of the general principles contained in the Outer Space Treaty are seen as customary
international law.
4
Commercial Space Launch Act, 49 U.S.C. §§ 2601-2623 (1984). Commercialization has been
protected from unfair competition by the United States by three agreements with foreign countries,
namely, Russia, China and the Ukraine.
5
See 47 U.S.C. § 763 (2000).
6
See generally, Commercial Space Launch Amendments Act, 49 U.S.C. § 701 (2004), construed in
Spencer H. Bromberg, Public Space Travel – 2005: A Legal Odyssey into the Current Regulatory
Environment for United States Space Adventurers Pioneering the Final Frontier 70 J. AIR L. &
COM. 639 (2005).
7
See Zhao Yun, A Legal Regime for Space Tourism: Creating Legal Certainty in Outer Space 74 J.
AIR & SPACE L. 959 (2009).
4 THE INDIAN JOURNAL OF INTERNATIONAL ECONOMIC LAW [Vol. 3 (2)

developments have historically had a geographical base in the United States,

commercial space is taking off as a global phenomenon.8

One area of interest in the commercial development of space relates to

the potential benefits of resource extraction from the surface and subsurface
of the moon and other celestial bodies. Celestial bodies are potentially an
important source of valuable natural resources. Several lunar missions have
demonstrated that the moon is rich in iron, aluminum, oxygen, potassium,
hydrogen, manganese and chromium. The moon also contains a substance
called Helium-3, which, combined with other materials, can be used as fuel
in fusion power reactors. While the facilities necessary to develop a continued
presence on the moon has yet to materialize, Japan, China and India all have
near-term lunar research programs, with Japan aiming to build a scientific
research center on the moon by 2020.9

International law prohibits the “national appropriation” of outer space,

including the moon and other celestial bodies.10 It also provides states the
right to freely explore and use outer space on a non-discriminatory basis,
free access to outer space, the right to freely investigate outer space for
scientific purposes, and declares that such exploration and use “shall be
carried out for the benefit and in the interests of all countries, irrespective
of their degree of economic or scientific development, and shall be the
province of all mankind”.11 These principles have led to a number of claims.
On the one hand, both developed states and private enterprise claim that
the lack of legal certainty with respect to extraterrestrial property rights in
both land and resources extracted therefrom hinders the development of
the technology required to exploit such resources. On the other hand,
developing countries hold that the principles declared in Article I of the
Outer Space Treaty are binding principles which require the redistribution

8
Global Award for Indian Space Agency’s Commercial Arm, SPACE MART (May 18, 2010), http://
www.spacemart.com/reports/Global_Award_For_Indian_Space_Agency_
Commercial_Arm_999.html.
9
Japan Draws Plan to Build Research Center on Moon, MOON DAILY (May 27, 2010), http://
www.nasa.gov/vision/universe/solarsystem/hubble_Moon.html.
10
Outer Space Treaty, supra note 3, art. II.
11
Outer Space Treaty, supra note 3, art. II.
2010] CONSTRUCTING A REGULATORY REGIME FOR THE EXPLOITATION OF 5
RESOURCES ON THE MOON AND OTHER CELESTIAL BODIES

of benefits, derived from exploitative activities, to all nations. Still another

set of “entrepreneurs” have claimed actual ownership of the moon and other
celestial bodies. Such claims are premised on a common argument that since
the Outer Space Treaty prohibits only ‘national’ claims, private claims are
permitted by international law.

This article evaluates the different contentions with respect to resource

extraction on the moon and other celestial bodies. Section II addresses the
lex lata as it relates to property rights in celestial bodies and resources
found thereon.12 While the law is clear as to property rights in land and in
fixtures on the land, it is less clear on resources extracted from those bodies.
This situation is unsupportable, as an unrestricted right of extraction would
create a sub-optimal and potentially unsustainable system of exploitation,
while a legal regime unduly restricting exploitative ventures through
disincentives to proprietary interests could stymie the technological
innovation necessary to develop such activities – positions which are likely
to be taken by developed and developing countries respectively. Section III
turns briefly from this discussion to address the claims of ‘extraterrestrial
real estate developers’. It demonstrates them to be false, both in terms of
established legal doctrine as well as of conflicts between their claims and
the principles of free exploration and use contained in the Outer Space
Treaty. Section IV returns to the debate between development and
distribution, exploring the need to balance these two positions through a
comparison of the failure of the Moon Agreement with the success of the
1988 World Administrative Radio Conference (WARC-ORB-88). Section
V draws the article to a close.

II. E XTRATERRESTRIAL P ROPERTY R IGHTS IN L AND AND

R ESOURCES
Despite the number of claims to the contrary, space law already contains
a high level of legal certainty in relation to most aspects of property rights.
These rights are primarily spelled out within the provisions of the Outer

12
Indeed, the regime generally follows the Roman law principles related to res communes. See THE
INSTITUTES OF JUSTINIAN 1-2, 5, 18 (J.T. Abdy & Bryan Walker trans. 1876).
6 THE INDIAN JOURNAL OF INTERNATIONAL ECONOMIC LAW [Vol. 3 (2)

Space Treaty.13 In addition to the rights contained in the corpus juris spatialis,
the International Telecommunications Union (ITU) developed a property right
of sorts relating to the use of the limited number of orbital slots and
frequencies within the geostationary orbit, or GSO,14 and the inter-
governmental agreement on the International Space Station contains some
provisions on the ownership of intellectual property rights for objects
developed in space.15
Of the rights mentioned above, our concern is with the principles
delineated in the Outer Space Treaty, and particularly in relation to three
classes of objects. Those objects are extraterrestrial property rights in land,
property rights in objects affixed to the moon or other celestial bodies and
resources extracted from such bodies. This section examines each in turn to
determine the law applicable to the individual parts.

A. The Non-Appropriation Principle and Claims to Rights in Land

Article II of the Outer Space Treaty provides that, “[o]uter space, including
the Moon and other celestial bodies, is not subject to national appropriation
by claim of sovereignty, by means of use or occupation, or by any other
means”.16 This principle, referred to as “the non-appropriation principle”,

13
Id. In addition, the Moon Agreement attempted to introduce additional principles to the legal
framework, such as those related to the need to maintain the environmental integrity of the celestial
body explored or exploited and the principle that the Moon and its natural resources were the
“common heritage of mankind”. These rules were never accepted by the majority of states, and as a
result the Agreement has received an extremely low number of ratifications. See Agreement
Governing the Activities of States on the Moon and Other Celestial Bodies, arts. 7, 11, Dec. 18,
1979, 1363 U.N.T.S. 3 [hereinafter Moon Agreement] (As of 2005, there are only 16 signatures and
11 ratifications. Of the space-faring nations, only France and India have signed the Agreement, and
both have failed to ratify it.). See also Henry R. Hertzfeld & Frans von der Dunk, Bringing Space Law
into the Commercial World: Property Rights without Sovereignty 6 CHI. J. INT’L L. 81, 85 (2005).
14
Hertzfeld & von der Dunk, supra note 13, at 83.
15
Agreement among the Government of Canada, Governments of the Member States of the European
Space Agency, the Government of Japan, the Government of the Russian Federation, and the
Government of the United States of America Concerning Cooperation on the Civil International
Space Station ,art. 21, Jan. 29, 1998, T.I.A.S. 12927. See also Hertzfeld & von der Dunk, supra note
13, at 83-84 (citing, in addition to the inter-governmental agreement, a NASA directive on IP
developed on the ISS).
16
Outer Space Treaty, supra note 3, art. II. For an analysis of Article II of the Outer Space Treaty, see
S. Gorove, Interpreting Article II of the Outer Space Treaty, PROC. ELEVENTH COLLOQUIUM ON L.
OUTER SPACE 40 (1968); L. Tennen, Article II of the Outer Space Treaty, the Status of the Moon
and Resulting Issues, PROC. FORTY-SEVENTH COLLOQUIUM ON L. OUTER SPACE 520 (2004).
2010] CONSTRUCTING A REGULATORY REGIME FOR THE EXPLOITATION OF 7
RESOURCES ON THE MOON AND OTHER CELESTIAL BODIES

was a watershed in international law. With this, the parties to the Treaty
effectively and emphatically ended claims of outer space being terra nullius.17
With relation to states, the possibility to claim sovereignty over this final
frontier effectively ended with the non-appropriation principle becoming
customary international law.

With respect to states, Article II draws a distinction between the

concepts of imperium and dominion, a distinction drawn by natural law, as
carried over from Roman law. Vattel noted that the relationship between
the state and the territory it governed consisted of two elements. The first
element consisted of the domain, a specified area of land which the state
owned and the benefits of which could be derived exclusively by the state.18
The second element was that of empire, or the sovereign command.19 By
including use, occupation or “any other means” within the scope of its
provisions, Article II explicitly extends beyond claims of sovereign command
to situations of de facto control of property without the assertion of sovereign
jurisdiction.20

Apologists for a private right of appropriation base their arguments on

the definition of the term “national”. They argue that while sovereign rights
are excluded from outer space by the non-appropriation principle, private
rights of ownership remain undisturbed. This argument ultimately turns on a
theory of property rights as antecedent and qualitatively superior to
sovereignty, creating a conflict ultimately rooted in the debate between the
jurisprudence of natural law – and particularly arguments based on the political
theory of John Locke – and positive law.21 While the philosophical contentions

17
See GEORG SCHWARZENBERGER & E.D. BROWN, A MANUAL OF INTERNATIONAL LAW 93(6th ed. 1976). The
authors note that, while the UNGA resolutions preceding the Outer Space Treaty prohibited
sovereign appropriation under international law, as General Assembly resolutions they were only
arguably binding upon the parties. With both space powers parties to Outer Space Treaty, any
argument that outer space could be appropriated by states was effectively shattered.
18
See EMMERICH DE VATTEL, THE LAW OF NATIONS BOOK I § 204 (1758); MALCOLM SHAW, TITLE TO
TERRITORY IN AFRICA: INTERNATIONAL LEGAL ISSUES 12 (1986).
19
Id.
20
Article II thus provides for the contentious issues relating to res communia identified by Shaw. See
SHAW, supra note 18. (“Whether [the distinction between property and sovereignty] could be
used to solve problems relating to the use of res communia, such as the sea-bed, is more doubtful.”)
21
See Kurt Anderson Baca, Property Rights in Outer Space 58 J. AIR L. & COM. 1041 (1992-93).
8 THE INDIAN JOURNAL OF INTERNATIONAL ECONOMIC LAW [Vol. 3 (2)

underlying this debate extend far beyond the scope of this article, it is worth
noting some of the problems related to such an interpretation. This article
will briefly outline three significant hurdles to such a jurisprudential
argument, two based in the terms of the Outer Space Treaty itself, and one
grounded in natural legal theory.

The first problem relates directly to the interpretation of the term ‘national’
as used within the treaty. In addition to Article II, the term ‘national’ as a
descriptor appears in relation to states’ responsibility for its “national
activities” in outer space.22 That provision, contained in the first sentence of
Article VI of the Treaty, provides, in relevant part:

States Parties to the Treaty shall bear international responsibility

for national activities in outer space, including the Moon and other
celestial bodies, whether such activities are carried on by
governmental agencies or by non-governmental entities, and for
assuring that national activities are carried out in conformity with
the provisions set forth in the present Treaty.23 (emphasis added)

The interpretation of treaties requires that the terms of the treaty be read
in the context of the agreement. Context is set by an interpretation not of each
provision on a stand-alone basis, but in the context of the treaty as a whole.24
Thus, absent a specific reason to the contrary, one would expect the term
‘national’ to maintain the same meaning as to the classes of activities, e.g.
governmental and non-governmental, which it covers. Approached from a
different perspective, one would similarly expect that the scope of national

22
See Outer Space Treaty, supra note 3, art. VI, art. IX. Article IX refers to “nationals” as parties
outside of the governmental structure (“If a State Party to the Treaty has reason to believe that an
activity or experiment planned by it or its nationals in outer space, including the Moon and other
celestial bodies, would cause potentially harmful interference with activities of other States Parties
in the peaceful exploration and use of outer space, including the Moon and other celestial bodies,
it shall undertake appropriate international consultations before proceeding with any such activity
or experiment.”).
23
Outer Space Treaty, supra note 3, art. VI. Article VI goes on to require the “appropriate state” to
both authorize and continuously supervise the activities of non-governmental entities, and further
provides that in the case of space activities conducted by international organizations the member
states of that organization will share the responsibilities ascribed by the Treaty.
24
International Law Commission, Draft Articles on the Law of Treaties with commentaries 2 Y.B.
INT’L L. COMMISSION 187, 221 (1966) (citing Competence of the ILO to Regulate Agricultural
Labour, P.C.I.J. (1922), Series B, Nos. 2 and 3, p . 23).
2010] CONSTRUCTING A REGULATORY REGIME FOR THE EXPLOITATION OF 9
RESOURCES ON THE MOON AND OTHER CELESTIAL BODIES

appropriation would include the types of actions included within the broader
term of national activities, since appropriation can be classified as a particular
subclass of action falling within the umbrella of a wider class of actions i.e.
‘activities’.

A second issue relates to the concept of ‘mankind’ as a class of legal subject

and, in the particular context of outer space law, what is meant by “[t]he
exploration and use of outer space, including the Moon and other celestial
bodies, … shall be the province of all mankind”.25 This tree bears fruit in the
form of two questions. The first such question is whether the idea of the
“province of mankind” was intended merely as a political exhortation of ideals
or reflects the intention to form a truly new category of law.26 There was
indeed a drive in the 1960s towards exploring a “law of mankind”, brought
out by a collective concern to prevent a declaration of war in an era of mutually
assured destruction.27 A corollary to the first question and one much more
difficult to answer is whether, if mankind as a collective unit was intended to
become a subject of international law, such extension was in fact created. The
developed world’s, and particularly the United States’s, rejection of the
“common heritage of mankind” principle brought much of the collective
impetus developed throughout the 1960s to a close. Yet the rejection of the
“common heritage” principle has much to do with the particular rules on the
distribution of the benefits of exploitative activities, and not with a conceptual
disagreement with mankind as a whole as an object of international law.

25
Outer Space Treaty, supra note 3, art. I. See Ernst Fasan, The Meaning of the Term “Mankind” in
Space Legal Language 2(2) J. SPACE L. 125 (1974). Beyond the scope of space law, see generally
Harry W. Jones, Law and the Idea of Mankind 62(5) COLUM. L. REV. 753 (1962). But see Adrian
Bueckling, The Strategy of Semantics and the “Mankind Provisions” of the Space Treaty 7 J. SPACE
L. 15 (1979).
26
See Fasan, id.
27
See Fasan, supra note 25, at 127-30 (surveying the works of Zhukov, Jenks, Gal, Cocca Gorove and
Lachs); Jones, supra note 25. One of the strongest proponents of the “law of mankind” movement
was Aldo Armando Cocca: see Aldo A. Cocca, The Supreme Interests of Mankind vis-à-vis the
Emergence of Direct Broadcast 2 J. SPACE L. 83, 83 (1974) (“In the present state of interdependence
of peoples, all national activities extending beyond the frontiers of the country of origin must be
limited and conditioned according to law. The international community is steadily progressing in
the elaboration of a more perfect law of mankind, independently from the law of States individually
considered. Those areas of specialization which are most developed at the moment, such as human
rights, atomic energy law, the law of the sea-bed and ocean floor, the protection of the environment
and, particularly, the law of outer space, are contributing toward this new expression of man in
society and in the planetary dimension.”)
10 THE INDIAN JOURNAL OF INTERNATIONAL ECONOMIC LAW [Vol. 3 (2)

A second question relates to the scope of the provision. Article I refers to

the “exploration and use” of outer space as being the province of mankind,
and not to outer space itself. Proponents of private property rights in
extraterrestrial land claim that this provision does not prohibit private claims
to land, so long as access to outer space, including celestial bodies, remains
open to exploration and use by states. While there is no explicit denial of
claims to private property contained within the Article, some practical
problems with such an interpretation remain. Most importantly, the free
exploration and use of outer space accorded to states by Article I create a
fundamental conflict with the right of exclusive use associated with private
property. While not addressed in the actual case, the case of Nemitz v. United
States28 illustrates the potential conflict between the freedom of exploration
and use granted in the Outer Space Treaty with the incentives derived from
the exclusive use of private property.29

A third issue relates to the context of private property rights within the
context of natural legal theory itself. Within that theory, the idea of the creation
of private property rights refers to the development of social relationships
pre-existing the formation of the political association of the state.30 Jurists,
however, are not of one opinion where the state exists, even within the natural
law tradition. Vattel’s own opinion shows that once a state has been formed,
the cumulative domain of the individuals comprising the state equals the
domain of the state itself:

Even the property of the individuals is, in the aggregate, to be

considered as the property of the nation, with respect to other
states. It, in some sort, really belongs to her, from the right she
has over the property of her citizens, because it constitutes a part
of the sum total of her riches, and augments her power.31

28
2004 WL 3167042 (D. Nev. 2004).
29
See infra, Part III.B.
30
HENRY SUMNER MAINE, ANCIENT LAW 243-48 (reprinted in Classics of Anthropology series, Ashley
Montagu ed. 1986) (referencing, inter alia, the English jurist William Blackstone and German
jurist Friedrich Carl von Savigny).
31
EMMERICH DE VATTEL, THE LAW OF NATIONS BOOK II § 81 (1758). In the case of the modern corporation,
whose very existence relies on a legal fiction of the state, would fall within the category of persons
within the state.
2010] CONSTRUCTING A REGULATORY REGIME FOR THE EXPLOITATION OF 11
RESOURCES ON THE MOON AND OTHER CELESTIAL BODIES

Additionally, Vattel draws a distinction between the ‘high domain’, which

is the country over which the state extends its sovereignty, and the ‘useful
domain’, corresponding with the rights belonging to the individuals in the
state.32 The latter can be separated from sovereignty and may exist in other
jurisdictions, in which case they are possessed as private individuals.33 Vattel’s
position largely supports extending Article II of the Outer Space Treaty to
the acts of private individuals.

B. Objects Affixed to the Moon or Other Celestial Bodies

Whereas Article II removes the possibility of states to claim either

dominium or imperium over outer space, including any celestial bodies
contained therein, the state of registry explicitly retains jurisdiction and control
over space objects launched into outer space, including the personnel onboard,
and irrespective of whether the object is in outer space or on a celestial body
such as the moon.34 Moreover, Article VIII recognizes that persons retain the
rights of ownership in the objects launched into space, including those landed
or constructed on a celestial body.35

While some commentators have noted an inherent conflict between the

provisions of Articles II and VIII of the Outer Space Treaty,36 the tension
between the two provisions is one of general scope and not specific to space
law. Indeed, such tension exists within any space of open-access where the
ability to control the actors within that space remains fragmented. In this
regard, the key element functionally differentiating space law from the law
relating to vessels operating on the high seas is the removal of the territorial
element from the command-control function in space law.

32
Id., § 83.
33
VATTEL, supra note 31, at § 83.
34
Outer Space Treaty, supra note 3, art. VIII.
35
Outer Space Treaty, supra note 3, art. VIII. Hertzfeld and von der Dunk have noted that there are
“no clear rules” as to objects made in outer space and constructed entirely of extraterrestrial
materials: see Hertzfeld & von der Dunk, supra note 13, at 83 (“With regard to any structure
essentially made from locally available resources, there are no clear rules, and it may be valuable
to establish clarity on this subject.”)
36
See David Goldman, Settlement and Sovereignty in Outer Space 22 U. W. ONTARIO L. REV. 155,
159-60 (1984); Baca, supra note 21, at 1066-67.
12 THE INDIAN JOURNAL OF INTERNATIONAL ECONOMIC LAW [Vol. 3 (2)

C. The Exploitation of Resources on the Moon and Other

Celestial Bodies

Of the rights and obligations with respect to property rights in outer space,
the most unclear remains the extent to which states can exploit the natural
resources found on the surface of celestial bodies.37 Most commentators agree
that some right of exploitation exists. There is also limited practice confirming
this, as both the United States and the Soviet Union have removed samples
from the lunar surface and brought them to earth. In each of these
circumstances, no state voiced any opposition to either state’s conduct.38

However, there is some uncertainty as to the extent of the right to extract

natural resources from those bodies. This degree of uncertainty is sometimes
reflected directly in commentators’ own vacillation between an unfettered
right to exploit and the uncertainty created by unclear legal provisions. The
following comment notes both an unconditional right to extract resources
from celestial bodies and a chilling effect resulting from uncertainty in the
legal regime:

Anything taken from space and returned to the earth becomes the
property of the person, company, or government that performs
the action, given the absence of United Nations treaty provisions
prohibiting such ownership. Added legal certainty may eventually
become necessary to prevent the undue stifling of relevant private
interests, especially with regard to minerals and other potentially
valuable resources that could be mined from celestial bodies. But
as nations become increasingly aware of the possibility of inflicting
environmental damage on celestial bodies, most will likely limit
any government or private activity that might endanger lunar or
other celestial environments.39

37
See Hertzfeld & von der Dunk, supra note 13, at 82-86. Also noting the lack of international law
on intellectual property rights developed in outer space, Hertzfeld & von der Dunk, supra note
13, at 83-84.
38
See Alan Wasser & Douglas Jobes, Space Settlements, Property Rights, and International Law:
Could a Lunar Settlement Claim the Lunar Real Estate It Needs to Survive? 73 J. AIR L. & COM. 37,
63 (2008).
39
Hertzfeld & von der Dunk, supra note 13, at 83.
2010] CONSTRUCTING A REGULATORY REGIME FOR THE EXPLOITATION OF 13
RESOURCES ON THE MOON AND OTHER CELESTIAL BODIES

The passage above implies at least two questions. The first is whether a
regime that permits the removal of ‘anything’ from space really permits an
unqualified removal of ‘everything’ from a particular celestial body. The fact
that ‘anything’ might be less than ‘everything’ is suggested in a later passage
in the same article:

Property rights exist in space, even without ownership or territorial

rights to celestial bodies, although their applicability to resource
extraction remains a contentious issue. Exactly what those rights
are and how far they may apply to the extraction of resources is
still under debate, creating uncertainty for a company looking to
invest in such ventures.40

That we are asking the question ‘if’ presupposes that we have not
determined the boundary.

The comment also raises a second question relating to the management

of exploitative space activities and their potential negative impact on the
outer space environment. Again, at least two scenarios exist, and are inevitably
linked to the resolution of the first issue. Where space law is interpreted as
creating an unlimited right of extraction, the legal regime is thus one of
unrestricted open access. This scenario is one described by Garrett Hardin in
his famous essay “The Tragedy of the Commons”.41 “Freedom in a commons”,
Hardin declared, “brings ruin to all.”42 According to Hardin, a commons scenario
incentivizes the overuse of a finite resource open to exploitation, which
ultimately results in the destruction of the resource used. Hardin illustrated
this scenario by imagining a public grazing pasture of finite dimensions which
was open to a number of herdsmen. Once the pasture reached its collective
capacity, the addition of any new grazing animal would generate a positive and
negative utility. Whereas the positive utility would be one and internalized by
the individual who increased the size of his herd, the negative utility would be
distributed throughout the community so that the portion of the negative
utility actually internalized would be less than one.43 The result was a scenario

40
Hertzfeld & von der Dunk, supra note 13, at 86.
41
Garrett Hardin, The Tragedy of the Commons 162 SCIENCE 1243 (1968).
42
Id.
43
Hardin, supra note 41, at 1244.
14 THE INDIAN JOURNAL OF INTERNATIONAL ECONOMIC LAW [Vol. 3 (2)

whereby the nature of the incentives and disincentives would lead to the
overuse and degradation of the resource while minimizing technological
innovation to improve productivity. Similarly, a failure to wholly internalize
the negative utility presents similar issues even in a second scenario of less-
than-complete open access.

Hardin’s argument is not without its criticisms. He fails, for example, to

account for the possibility that self-regulation could positively constrain the
use of a commons. Nevertheless, he presents a powerful argument against an
unregulated commons scenario, whether the resource in question is
pastureland or the moon. In order to control for the problems associated with
an open-access regime, any legal architecture which contemplates the
efficient, continued and sustainable exploitation of extraterrestrial resources
should confine the impact of the negative utility to the individual who receives
the positive utility.

III. E XTRATERRESTRIAL R EAL E STATE: C URRENT C LAIMS

AND P OTENTIAL I SSUES

“Nothing could be better than to own your own crater”.44 So declares the
website of a company called Lunar Registry, which, together with another
undertaking named Lunar Republic Society, offers its clients the possibility
to buy “your own acre of Moon property, complete with an elegantly engraved
and personalized parchment deed certificate” and with full mineral rights
over the acquired piece of lunar soil.45 Nor is Lunar Registry the first, nor the
most famous, of a growing number of claims of private ownership of various
celestial bodies. A brief browse through the internet is sufficient to identify
several websites offering the possibility of purchasing extraterrestrial ‘real
estate’, whether it is on the moon or on the surface of any other planet of our
solar system.

While the activities of these ‘entrepreneurs’, in and of themselves, may

be considered little more than a joke, the proliferation of such claims

44
Lunar Registry: The International Lunar Lands Registry (June 1, 2010), http://
www.lunarregistry.com/index.html.
45
Id.
2010] CONSTRUCTING A REGULATORY REGIME FOR THE EXPLOITATION OF 15
RESOURCES ON THE MOON AND OTHER CELESTIAL BODIES

accompanied by the public perception that such claims are valid can pose a
serious threat to the development of commercial space.46 This section
addresses three aspects of extraterrestrial real estate. First, it places the
development and scope of such claims in historical context through a non-
exhaustive survey of claims to celestial bodies. Second, it discusses the
misinterpretation of law and the misallocation of resources that these claims
may lead to, if pursued. Third, it highlights actual developments to
demonstrate the incompatibility of private property claims with the principles
contained in the corpus juris spatialis.

A. A BRIEF HISTORY OF PRIVATE CLAIMS TO EXTRATERRESTRIAL REAL ESTATE

While claims to extraterrestrial real estate proliferated simultaneously

with the development of space technology, claims to lunar title date back
to 15 July 1756, when the Prussian emperor Frederick the Great gifted the
moon to a man named Aul Juergens.47 In doing so, the Prussian emperor
also established a line of inheritance – today, this claim is held by Martin
Juergens.48

It took nearly 200 years for a new claim to arise. In 1955, Robert R.
Coles, a former chairman of New York’s Hayden Planetarium, claimed
ownership of the Moon.49 In 1962, before the launch of the first lunar probe
of the United States, Ranger 3, an individual residing in one of the British
dominions sent a telegram to President Eisenhower notifying him that he

46
See Hertzfeld & von der Dunk, supra note 13, at 82, 91-92 (noting that “[t]he most threatening
current problem surrounding the issue of real property rights in space is in actuality not related to
space entrepreneurship. It instead arises from shortsighted greed premised on misinterpretations
of treaties and other applicable laws. For example, several companies have been selling land on the
Moon and issuing “deeds” to that land, behavior which unequivocally violates space law treaties. If
the public perceives that this action is legal, as evidenced by the lack of government willingness in
putting a halt to these activities, serious harm could result in the future.” Id. at 83.).
47
Virgiliu Pop, The Men Who Sold the Moon: Science Fiction or Legal Nonsense? 17 SPACE POL’Y
195 (2001).
48
See id.; Gyula Gal, Acquisition of Property in the Legal Regime of Celestial Bodies, PROC. THIRTY-
NINTH COLLOQUIUM ON L. OUTER SPACE 45 (1996). According to Juergens, his title lies somewhere in
the German Bundesarchiv. He has also filed a cease-and-desist letter with lunar proprietor Dennis
Hope. D. Trull, The Moon Is Mine, http://www.parascope.com/articles/1196/Moonw.htm.
49
This event is described by Pop. See Virgiliu Pop, Lunar Real Estate: Buyer, Beware! http://
www.spacefuture.com/archive/lunar_real_estate_buyer_beware.shtml.
16 THE INDIAN JOURNAL OF INTERNATIONAL ECONOMIC LAW [Vol. 3 (2)

had filed a claim to a certain lunar area and that he would consider the
United States responsible for any damage the probe may cause to his
property.50 In one of the more creative claims, in 1969, shortly after the
success of Apollo 11, a man was arrested in Brazil for selling parts of the
lunar soil at a price of $25 each. The defendant rested his defense on the
argument that he had sold parcels of the moon to Buzz Aldrin and Lance
Armstrong, the two astronauts having gone to the moon to inspect their
newly acquired property.51 The following year a company called Celestial
Gardens sold lunar plots indentified on the basis of a United States military
map.52 Further exploration has yielded more audacious claims. In 1992, a
company known as Space Pioneers declared that it owned all the planets in
the Milky Way, and sold deeds to one-acre parcels on Mars at the price of
US$ 29.95 per acre.53

The most famous “extraterrestrial real estate” company appears to be Lunar

Embassy, founded in 1980 by the American entrepreneur Dennis Hope.54
While relatively unsuccessful at first, his business received much attention
during the new media boom of late 1990’s and early 2000’s. According to the
Lunar Embassy website, thousands of thousands of customers have already
bought plots of the moon.55 As a consequence of this success, Lunar Embassy
expanded its range of activities. It started appointing local representatives
outside the United States, calling them ‘ambassadors’ and selling
extraterrestrial real estate on other celestial bodies, leading to further
commercial success and the occasional courtroom drama. In 2004, Canada
jailed the Lunar Embassy ambassador Lisa Fulkerson, accusing her of fraud

50
Id. See also G.D. Schrader, National sovereignty in space, PROC. FIFTH COLLOQUIUM ON L. OUTER
SPACE 42 (1962). This issue has had no further development, maybe because Ranger 3 failed to
reach the lunar surface.
51
According to the salesmen, the Apollo 11 mission was conceived as a means of inspecting Neil
Armstrong and Buzz Aldrin’s own claims to the Moon purchased from the individual. See Pop,
supra note 47, at 196 (citing David L., Seller of Fake Moon Rock May Get Prison (Nov. 2, 2000),
http://www.space.com/news/Moon-rock_guilt_001102.html).
52
Id.
53
Pop, supra note 49.
54
For information on Lunar Embassy, see Lunar Embassy World Headquarters, http://
www.lunarembassy.com.
55
Id.
2010] CONSTRUCTING A REGULATORY REGIME FOR THE EXPLOITATION OF 17
RESOURCES ON THE MOON AND OTHER CELESTIAL BODIES

and theft.56 In 2005, the business license of the Lunar Embassy in China was
suspended and the company fined CNY 50,000 on grounds of speculation,
fraud and profiteering.57 This latter case represents the first occasion in which
a national court has declared the activities of extraterrestrial real estate
companies illegal.

Lunar proprietors, however, are not only defendants in the courtroom.

Claims that national space agencies have infringed on private owners’ property
rights have also emerged in both national and international contexts. In July
1997, Adam Ismail, Mustafa Khalil and Abdullah al-Umari filed a lawsuit in
San’a, Yemen against the National Aeronautics and Space Administration
(NASA) requesting the immediate cessation of all Pathfinder operations on
Mars pending a verdict of the court.58 These three individuals argued that
Mars belonged to their families for 3000 years and that NASA, by not
informing them or asking their permission to carry out its operations, had
inadvertently trespassed on their property.59 The applicants withdrew the
case when the Yemeni Prosecutor General threatened them with arrest – only
to reappear the next year selling Martian real estate at $2 a square meter.60

A second claim against NASA emerged in the form of a federal civil suit
in Nemitz v. United States,61 brought by American citizen Gregory Nemitz
against both NASA and the United States Department of State for trespassing

56
Buy me to the Moon: Earthlings selling lunar landscape, USA TODAY (Mar. 28, 2004), http://
www.usatoday.com/tech/news/2004-03-28-lunar-sales_x.htm (also documenting the interesting
case of Rene Veenema, a Dutch national who falsely claimed to sell Lunar Embassy property in the
Netherlands); Luna Society International, Luna Society International: The Official Website of the
Moon, http://www.moon.com.co/; Buy Me to the Moon: Make Millions Selling Lunar Landscape,
http://www.redorbit.com/news/space/48205/buy_me_to_the_Moon_make_
millions_selling_lunar_landscape/index.html.
57
See Beijing authorities suspend license of “Lunar Embassy”, CHINA DAILY (May 11, 2005), http://
www.chinadaily.com.cn/english/doc/2005-11/07/content_492152.htm.
58
For a description of this case, see W. White, Interpreting Article II of the Outer Space Treaty,
PROC. FORTY-SIXTH COLLOQUIUM ON L. OUTER SPACE 339 (2003). See also Pop, supra note 47, at 197.
59
Pop, supra note 47, at 197
60
Pop, supra note 47, at 197. For an enjoyable article on their entrepreneurial efforts, see also
Barbara Plett, Despatches: Yemenis Claim Mars, BBC NEWS (Mar. 22, 1998), http://news.bbc.co.uk/
2/hi/despatches/67814.stm (also noting source of claim derived from Himyaritic and Sabaean
mythologies).
61
2004 WL 3167042 (D. Nev. 2004).
18 THE INDIAN JOURNAL OF INTERNATIONAL ECONOMIC LAW [Vol. 3 (2)

on the asteroid Eros.62 In the suit, Mr. Nemitz requested NASA pay a parking
fee for landing the NEAR spacecraft on the asteroid, which he had purchased
and registered with a private “space registry” called Archimedes Institute. In
April 2004, the District Court of Nevada dismissed Mr. Nemitz’s claim for
failure to state a cause of action, stating in part that, “neither the failure to the
United States to ratify the [Moon Agreement], nor the United States’[s]
ratification in 1967 of the [Outer Space Treaty], created any rights in Nemitz
to appropriate private property rights on asteroids”.63 The United States Court
of Appeals for the Ninth Circuit affirmed the decision of the District Court.64

The Nemitz case is also useful because it introduces a further element

into our discussion – the creation of international registries for extraterrestrial
proprietary claims.65 The difference with other undertakings consists in the
fact that these companies do not claim ownership of celestial bodies. Rather,
their activities act as a means of recognizing the claims of those individuals
claiming extraterrestrial property rights. In other words, they claim to solve
the quite separate issue of allocating property rights.

B. Problems of Misinterpretation and Misallocation

Extraterrestrial real estate developers are well aware of the Outer Space
Treaty and of the non-appropriation principle contained in Article II.66 They
62
For information on the Nemitz case see: W. White, Nemitz vs. US, the First Real Property Case in
United States Courts, PROC. FORTY-SEVENTH COLLOQUIUM ON L. OF OUTER SPACE 339 (2004).
63
Nemitz v. United States, Order CV-N-03-0599-HDM (U.S.D.C., Nevada, 27 April 2004), http://
www.erosproject.com/order01.html. Interestingly, while NASA explicitly avoided interpreting
article II of the Outer Space Treaty, a letter by the Department of State’s Bureau of Oceans and
International Environmental and Scientific Affairs interpreted article II of the Outer Space Treaty
as denying private claims to extraterrestrial real property (“We have reviewed the ‘notice’ dated
February 13, 2003, that you sent to the US Department of State. In the view of the Department,
private ownership of an asteroid is precluded by Article II of the Outer Space Treaty of 1967.
Accordingly, we have concluded that your claim is without legal basis.”).
64
The text of the decision is here repeated in full, taken from http://www.erosproject.com/appeal/
apindex.html.:
Gregory Nemitz appeals pro se from the district court’s dismissal of his complaint for failure to
state a claim in his action seeking a declaratory judgment concerning alleged private property
on the asteroid 433, “EROS.” We affirm for the reasons stated by the district court in its order
dismissing the complaint, filed on April 26, 2004. (1)
Footnote (1): Nemitz’s pending motions to convene an Article III court and to file an amicus brief
are denied.
65
See Lunar Federation company, http://lunarfederation.com/faq.htm (link now broken). For
information on the Archimedes Institute, see The Archimedes Institute , http://
www.permanent.com/ep-archi.htm.
66
Supra note 15.
2010] CONSTRUCTING A REGULATORY REGIME FOR THE EXPLOITATION OF 19
RESOURCES ON THE MOON AND OTHER CELESTIAL BODIES

have also developed a legal argument as to why their claims are valid,
interpreting Article II as non-applicable to questions of private
appropriation.67 Lunar Embassy, for example, provides the following
(questionable) legal reasoning behind its claim to own the Moon:
[Acquiring title to extraterritorial property is] a bit like in the old
west: Who stakes their claim on a piece of land first, gets the best
property. This is modeled on old american [sic] law. Such a claim
must be registered with your local Government Office for claim
registries. In regard to Lunar properties, it obviously helps, if this
is also done in the USA, as the Americans were the first to walk
on the Moon and plant their flag on it (ie [sic] it could be argued,
that if the Moon ever belonged to anyone, it certainly belongs
more to the USA than any other nation).68
Hope’s claims to lunar property rest on three arguments. The first
argument is that lunar property is akin to terra nullius, and is thus free for the
taking. The second argument is that registering his property with a United
States agency protects his claims because the United States was the first country
to land on the moon and thus, it ‘belongs’ to the United States. The third is
that by notifying the United States government and the United Nations of his
claim and having received no response, he had received the tacit approval of
the authorities over his ownership of the moon.

Quite outside of the general discussion on the possibility of private

ownership, it is quite easy to see the fallacy in his argumentation.69 The second
claim proves easiest to invalidate, as it follows that the United States has
appropriated the Moon, an act expressly prohibited in Article II of the Outer
Space Treaty.70 Likewise, the third claim is wholly unavailing, as silence
does not entail acquiescence. This leaves only the first claim, that outer space
is in fact something akin to terra nullius. However, Hope’s contentions fail

67
See supra, s. II.A.
68
See supra note 52. Using Hope’s own expression of the norms and procedure of claiming lunar
territory proves useful for two reasons. First, Hope’s claims demonstrate in very concrete terms
the fallacies underlying current claims to extraterrestrial property. Second, they provide a firm
foundation of understanding the confusion underlying interpretation of Article II.
69
For the latter, see supra, s. II.A.
70
Outer Space Treaty, supra note 3 and accompanying text.
20 THE INDIAN JOURNAL OF INTERNATIONAL ECONOMIC LAW [Vol. 3 (2)

to meet the requirements to satisfy such claims, whether in civil or

international law. The requirement that a claimant actually make effective
use of the property claimed has a long tradition, going back to principles of
occupatio under Roman law.71 In public international law, the requirement
was institutionalized by requiring the claimant state to possess and
administrate the affairs of the acquired territory, in what became the principle
of first discovery and effective occupation.72 In the Island of Palmas decision,
the International Court of Justice translated this into the principle of first
discovery and effective occupation.73 In the case of the American frontier,
acts designed to push frontier settlement by recognizing claims to frontier
land, such as the Homestead Act, required not only a claim, but actual
“settlement and cultivation”.74

Developments in the area of extraterrestrial real estate also illustrate issues

of concern in the realm of allocation and exclusion. In this respect, the Nemitz
case is quite interesting. To be effective, a system of property rights requires
not only the recognition of the capacity to hold such right, but also the ability
to allocate those rights to particular individuals and to exclude other
individuals from the property once allocated.75 That no recognized regulatory
mechanism exists to collect, examine and recognize potential claims to lunar
property presents extreme problems in sustaining a viable property rights

71
HENRY SUMNER MAINE, ANCIENT LAW 239 (Ashley Montagu, ed., University of Arizona Press 1986)
(1861) (“The Roman principle of Occupancy, and the rules into which the jurisconsults expanded
it, are the source of all modern International Law on the subject of … the acquisition of sovereign
rights in newly discovered countries. They have also supplied a theory of the Origin of Property,
which is as once the popular theory, and the theory which, in one form or another, is acquiesced
in by the great majority of speculative jurists.” [emphasis added]). In the sphere of property rights,
the Roman law principle of occupation was used as a means of explaining the transformation from
the state of nature to a system of property rights, a theory expressed by jurists of both the common
law and civil law traditions. Id. at 243-48 (referencing, inter alia, the English jurist William
Blackstone and German jurist Friedrich Carl von Savigny). See also SURYA P. SHARMA, TERRITORIAL
ACQUISITION, DISPUTES AND INTERNATIONAL LAW 61 (1997).
72
Oppenheim succinctly summarized these requirements in his treatise on international law in the
following words: “Possession (by settlement) and administration are the two essential facts that
constitute an effective occupation.” LASSA F.L. OPPENHEIM, INTERNATIONAL LAW: A TREATISE 555 (8th
ed. 1955). See also SCHWARZENBERGER & BROWN, supra note 15, at 97 & 563.
73
See e.g. Island of Palmas Case, 2 U.N. Rep. Intl. Arb. Awards 829 .
74
See e.g. Homestead Act of 1862 (adopted during the 37th congress, session II, ch. LXXV, 1862).
75
Baca, supra note 21.
2010] CONSTRUCTING A REGULATORY REGIME FOR THE EXPLOITATION OF 21
RESOURCES ON THE MOON AND OTHER CELESTIAL BODIES

regime. Nemitz could not assert his claim against the United States not only
because the registry maintained by the Archimedes Institute does not
crystallize his rights to Eros, but also because an appropriate alternative
mechanism does not exist.

The Nemitz case also clearly demonstrates the conflict between the
exclusionary nature of private property rights and the freedom of states to
explore outer space. The latter right is explicitly conveyed within the terms
of Article I of the Outer Space Treaty, which grants states free access to outer
space, the right to freely explore and use outer space on a non-discriminatory
basis and the right to freely investigate outer space for scientific purposes.76
Such rights also explicitly include the moon and other celestial bodies.77 State
access, however, weakens the incentives provided by a private property rights
regime. While neither the government agency nor the court looked to Article
I to justify its decision, either could have asserted the positive right of the
United States to access and investigate the Eros asteroid for scientific purposes.

Nemitz also demonstrates a problem wholly different from legal

uncertainty but no less serious – what we might call behavioral uncertainty.
Behavioral uncertainty refers to the perceived position of various actors and
how those perceptions influence their actions with respect to other actors. As
Nemitz demonstrates, those who believe their claims to be valid might well
act on them. Such actions can have a negative influence on business decisions
quite independent of legal uncertainties.78

IV. B ETWEEN OWNERSHIP I NCENTIVES AND

D ISTRIBUTIONAL E QUITY : S TRIKING THE B ALANCE
Up to this point, this article has addressed certain normative aspects of
the legal regime governing the exploitation of the moon and other celestial
bodies, and has demonstrated how current claims of extraterrestrial ‘real estate
developers’ both operate on misinterpretations of the law and present potential
conflicts between a private system of property rights and the current legal
76
Outer Space Treaty, supra note 3, art. I.
77
Outer Space Treaty, supra note 3, art. I.
78
Hertzfeld & von der Dunk, supra note 13, at 92.
22 THE INDIAN JOURNAL OF INTERNATIONAL ECONOMIC LAW [Vol. 3 (2)

regime governing outer space.79 We have also discussed certain uncertainties

and inefficiencies in the current regime as well as their potential effects on
any space activities aimed at exploiting the resources contained on or in the
moon or other celestial bodies.80

Ultimately, the resolution of these uncertainties and inefficiencies is tied

to the distribution of the benefits received from exploiting those resources.
This question has proven to be extremely difficult. In the area of space law,
the debate over a regulatory framework for resources on celestial bodies has
centered on this pivot between incentivizing research and development
through private ownership and the need to provide for some form of
redistribution between the few with technological resources to exploit those
resources and the many who do not. This tension is best exemplified in both
the failure of the Moon Agreement to garner any substantive form of support
and the success of the ITU in creating a system to manage the GSO.

A. The Moon Agreement and WARC-ORB-88: A Common Tale

with Divergent Endings

The Moon Agreement provides for the development of a regulatory

framework for the exploitation of lunar resources. More specifically, Article
11(5) provides that, “States Parties to this Agreement hereby undertake to
establish an international regime, including appropriate procedures, to
govern the exploitation of the natural resources of the Moon as such
exploitation is about to become feasible”.81 The regulatory framework to
be established in accordance with the Agreement is to be based on the principle

79
See generally supra, s. III.
80
See generally supra, s. II.
81
Moon Agreement, supra note 13, art. 11(5). The Moon Agreement treats resources in place
differently than those once extracted. Moon Agreement, supra note 13, art. 11(3) (“Neither the
surface nor the subsurface of the Moon, nor any part thereof or natural resources in place, shall
become property of any State, international intergovernmental or non-governmental organization,
national organization or non-governmental entity or of any natural person. The placement of
personnel, space vehicles, equipment, facilities, stations and installations on or below the surface of
the Moon, including structures connected with its surface or subsurface, shall not create a right of
ownership over the surface or the subsurface of the Moon or any areas thereof. The foregoing
provisions are without prejudice to the international regime referred to in paragraph 5 of this
article.” [emphasis added]).
2010] CONSTRUCTING A REGULATORY REGIME FOR THE EXPLOITATION OF 23
RESOURCES ON THE MOON AND OTHER CELESTIAL BODIES

of the “common heritage of mankind”.82 Unlike the province of all mankind,

the concept of common heritage of mankind has proven to be extremely
controversial, calling for the recognition of a common propriety interest in a
particular landscape.

The logical conclusion of such expression is found in Article 11(7)(d),

requiring the equitable distribution of the benefits of exploitation amongst
all nations:

The main purposes of the international regime to be established

shall include … [a]n equitable sharing by all States Parties in the
benefits derived from those resources, whereby the interests
and needs of the developing countries, as well as the efforts of
those countries which have contributed either directly or indirectly
to the exploration of the Moon, shall be given special
consideration.83

This provision primarily represents the interests of the developing world

in ensuring their ability to access such benefits, given the current technological
lag. The rejection of this form of redistribution by the technological ‘haves’,
most notably the United States, is cited as the principle reason for the failure
of the Moon Agreement to develop any significant following.84

So far, the most developed regulatory system for a scarce resource in

outer space is the regulation of space and frequency allocations in the GSO
by the ITU, first agreed upon in WARC-ORB-88. The GSO refers to a
particular orbit located 35.757 kilometers above the equator. In this particular
location, satellites rotate around the earth in 23 hour 56 minutes and 4 seconds,
a period which is synchronous with the earth’s rotation on its axis, a feature
which fixes the object relative to a particular point on the earth’s surface. A
satellite placed in the GSO can continuously cover a particular area measuring

82
Moon Agreement, supra note 13, art. 11(1).
83
Moon Agreement, supra note 13, art. 11(7)(d).
84
Indeed, ratification of the Moon Agreement has sometimes negatively affected a state with
respect to its involvement in the United States space program. Most notably, Australia’s ratification
of the Moon Agreement caused significant concern for the United States when considering
whether to conclude a treaty with Australia for locating an emergency landing facility for its
shuttles.
24 THE INDIAN JOURNAL OF INTERNATIONAL ECONOMIC LAW [Vol. 3 (2)

approximately one third of the earth’s surface. Thus, a service provider can
provide almost global coverage with just three satellites. This fact makes the
GSO particularly valuable for telecommunications, meteorological and other
service providers.

Several characteristics particular to the GSO have also required the

regulation of its use. These relate both to the position of the satellites
within orbit and the frequencies at which those satellites transmit signals.
Because the GSO is relative to a particular position on and distance from
the earth, the number of positions in the orbit, called orbital slots, are
limited. It has been estimated that the GSO could accommodate roughly
1800 satellites, each located 0.2° from each other, without facing the risk
of collision or interference. Currently, the number of satellites is far from
this figure and thus the risk of collision among satellites in the GSO is
relatively low. The more imperative problem relates to the possibility of
radio frequency interference between systems. If two different
transmissions are made in the same geographic area at the same frequency,
they will interfere with each other, leading to loss or deterioration of the
signal. The distance required to operate the same frequency without
interference is much greater than the 0.2° between slots. Failure to properly
coordinate frequencies has resulted in real problems.85 As a consequence
of these impediments, the geostationary orbit is considered to be a limited
natural resource.

The regulatory regime which has been developed from issues related to
the GSO provides a second example of, this time a successful, balancing the
issues of incentivizing development and innovation through the acquisition
of a proprietary interest in the use of the orbital slot and frequency and the
need to ensure an equitable distribution of benefits between those with present
access and those without. Again, the debate was highly polarized. Those who
could access the GSO preferred the incumbent ‘first-come, first-served’
principle on which the system of allocation operated. The developing countries

85
See K.U. Schrogl, Question relating to the character and utilization of the geostationary orbit, in
INTERNATIONAL SPACE LAW IN THE MAKING: CURRENT ISSUES IN THE UNITED NATIONS CONVENTIONS ON THE
PEACEFUL USES OF OUTER SPACE 151 (K.U. Schrogle & M. Benkö eds., 1993); R.S. Jakhu, The legal
issues of the geostationary orbit 7 ANNALS AIR & SPACE L. 333 (1982).
2010] CONSTRUCTING A REGULATORY REGIME FOR THE EXPLOITATION OF 25
RESOURCES ON THE MOON AND OTHER CELESTIAL BODIES

advocated a system of a priori distribution to ensure access.86 After nearly

two decades of disagreement, the WARC-ORB-88 modified the ‘first-come,
first-served’ principle to provide more equitable access to developing
countries.87 While recognizing the allocations created under the old
system, a new system of allocation provided each country with a nominal
allotment in terms of both space and frequency.88 The provisions of
WARC-ORB-88, regulating property in terms of usufruct, generally
comport with space law.

B. Going Forward: Some Suggestions and Considerations

The success of the ITU’s WARC-ORB-88, when compared with the failure
of the Moon Agreement to garner any significant form of support, suggests
the need for a more flexible approach to the issue of incentivizing
rapprochement and the value of compromise. Compromise has many
advantages in terms of increasing the legitimacy of the outcome reached and,
thus, of ensuring compliance while achieving the substantive goals of
technological progress and distributional equity. A comparison of the relative

86
See Baca, supra note 21, at 1079 (“The developed nations preferred the flexibility of the old
process based on case-by-case coordination and first-come, first-served priority. … On the other
hand, the developing nations favored a rigid a priori plan that would guarantee access in the future.
The developed nations, while optimistic that all nations may be accommodated in the orbit, feared
that the a priori planning approach would promote rigid technical specifications and remove
incentives for technical innovation. The result of such a plan could be an artificial scarcity in orbit
positions and inefficient and inequitable use of the resource in general.”). See also Milton Smith,
A New Era for the International Regulation of Satellite Communications, XIV ANN. AIR & SP. L.
449, 450 (1989) (noting that “[m]oreover, the concerns of developing countries regarding their
future access to the orbit/spectrum resource were understandable in light of the increasingly
intensive use being made of that resource by developed countries. Although developed countries
contended that advancing technology provides a guarantee for future access, developing countries
had a general distrust of solutions based on technology since advanced technologies are often not
affordable for them.” Smith, a legal advisor to the US WARC-ORB-88 delegation, goes on to
develop the developed countries’ position, already described in Baca, supra note 21, at 1079.).
87
For an analysis of the WARC 88 and of its main innovation see: C.Q. Christol, The legal status of
the geostationary orbit in the light of the 1985-1988 activities of the ITU, PROC. THIRTY-SECOND
COLLOQUIUM ON L. OF OUTER SPACE 215 (1989); S. Ospina, The ITU and WARC_ORB: will the
revised radio regulations result in a sui-generis legal regime for the GSO?, PROC. THIRTY-SECOND
COLLOQUIUM ON L. OF OUTER SPACE 247 (1989); T. Lozanova, Legal status of the geostationary orbit
in the light of the recent activities of ITU, PROC. THIRTY-SECOND COLLOQUIUM ON L. OF OUTER SPACE
233 (1989).
88
Smith, supra note 86, at 455-56.
26 THE INDIAN JOURNAL OF INTERNATIONAL ECONOMIC LAW [Vol. 3 (2)

success and failure of the two regimes yields some potentially important
considerations when addressing a future regime for exploitative activities on
the Moon or other celestial body.

Perhaps most obvious is the role actual technological capabilities played

in influencing position. Compromise was most certainly a more pressing
issue in the case of the GSO in the 1970s and 1980s than current concerns of
overuse of limited lunar resources. In the case of the GSO, satellite technology
was both present and increasingly used by a select number of advanced
countries. In the Bogota Declaration of 1976,89 a number of developing
countries along the equator attempted to exclude the GSO from the definition
of outer space in order to assert control over the resource. Moreover, the
agenda set for WARC-ORB-88 was perceived as a last chance to achieve a
solution eight years in the making.90 Failure, therefore, would have been a
much more tangible loss in the case of the GSO, as compared to the general
air of noncommittal in the case of exploitation on the moon.

A comparison of the two regimes also highlights some interesting

conclusions relating to the role institutions play in the structure of a negotiated
compromise. Specifically, the case of WARC-ORB-88 suggests the value of
having a credible, existing regulatory organization in reaching a negotiated
solution. Where such an organization exists, strong levels of delegation and
agreement to be bound to commitments undertaken can make up for vague
expressions as to the scope of commitment.91 Indeed, a relatively low level of
precision in language may prove more effective in institution-building than
caging the institution within a set of precisely-framed competences.92 In the
case of WARC-ORB-88, the availability of the ITU, an international

89
Declaration of the First Meeting of Equatorial Countries, Dec. 3, 1976. The Declaration has been
reproduced in 6 J. SPACE L. 193 (1978).
90
Smith, supra note 86, at 452. (“The knowledge that no additional session was scheduled to resolve
matters, if this session proved unsuccessful, mandated a business-like approach without resorting
to extraneous political issues.”).
91
This is a central argument of the legalization literature. See e.g. Kenneth W. Abbott et al., The
Concept of Legalization 54(3) INT’L ORG. 401, 405-06 (2000). (discussing the Sherman Act, the
EEC competition law provisions, and the 1987 Montreal Protocol on Subtances that Deplete the
Ozone).
92
Id. (noting the favorability of the vague provisions in the Sherman and EC Treaty).
2010] CONSTRUCTING A REGULATORY REGIME FOR THE EXPLOITATION OF 27
RESOURCES ON THE MOON AND OTHER CELESTIAL BODIES

organization with a historical record of fairness and effectiveness, was of

critical importance in terms of both setting the agenda for compromise and
providing an institutional framework to which states could delegate
monitoring and compliance tasks. In contrast, the Moon Agreement
committed states to a vaguely described third party organization while making
explicit and precise commitments as to the distribution of any benefit derived
from a particular state’s activities. The high level of precision in the
commitments undertaken in the Moon Agreement is a prime example of too
much too soon.

V. C ONCLUSION
While this article has addressed a number of themes, analysis has
converged on two points. First, it has evaluated the present legal regime and
articulated specific problems to the further development of commercial space
in the area of the exploitation of resources on the Moon and other celestial
bodies. Such issues have focused on the creation of legal certainty to
incentivize the research and development of space technology and on the
legal means of incentivizing sustainability in exploiting such resources.
Second, the article has demonstrated that in order to achieve the goals of
certainty and sustainability, state parties will have to address the issues related
to the distribution of the benefits of such activities. In this regard, the Moon
Agreement and WARC-ORB-88 have provided some initial means of
exploring possible structures. The failure of one and the success of the other
further suggest a path towards an acceptable regulatory regime for the
exploitation of the moon and other celestial bodies.